If your business employs 50 or more people, the reporting window that opens on 1 September 2026 is not the same as the one you completed last year. Last year was a baseline. This year you get measured.

How we got here

The Employment Equity Amendment Act 4 of 2022 came into effect on 1 January 2025. Two changes did most of the work.

• The definition of a designated employer changed. An employer is now designated on headcount alone: 50 or more employees. The turnover criterion has been removed, so some employers who previously fell outside formal EE duties are now subject to full compliance.
• The Minister gained the power to set numerical targets by sector. On 15 April 2025, new Employment Equity Regulations and a Determination of Sectoral Numerical Targets were published, applying to 18 national economic sectors. The targets run from 1 September 2025 to 31 August 2030, and the target for the employment of persons with disabilities rises from 2% to 3%.

Employers no longer define their own endpoint. When you select your sector on the reporting portal, the 2030 sector targets populate automatically, and your Employment Equity Plan is expected to show credible annual progress towards them.

The legal challenges have failed

Some employers have been waiting to see whether the targets would survive litigation. They have. The Gauteng High Court dismissed the challenge in August 2025. The Constitutional Court refused leave to appeal directly on 10 March 2026. Three days later, the Supreme Court of Appeal dismissed the application for leave to appeal with costs, finding no reasonable prospect of success.

A substantive constitutional challenge to section 15A continues, but there is no interdict and no suspension. The targets are binding and enforceable now. Wait-and-see is no longer a strategy. It is exposure.

What changes in this cycle

In the baseline cycle, first-time reporters were not measured on their annual EE targets, because there was nothing yet to measure. From 1 September 2026 to 15 January 2027, the Department of Employment and Labour conducts its first review of annual EE targets, to assess progress towards the five-year sector goals.

The portal closes after 15 January 2027. It does not reopen for latecomers.

What non-compliance costs

Under Schedule 1 of the Act, a first contravention may attract a fine of the greater of R1.5 million or 2% of annual turnover, escalating for repeat contraventions to the greater of R2.7 million or 10% of turnover.

There is a second, quieter cost. A certificate of compliance under section 53, valid for 12 months, is now required to do business with the State. No certificate, no state contracts.

What alignment actually requires

Alignment does not mean achieving 100% compliance with every numerical target at every occupational level. It means demonstrating a credible, evidence-based trajectory towards the sector targets, supported by concrete affirmative action measures, and, where targets genuinely cannot be met, well-substantiated justifications. The regulations set out seven justifiable reasons for failing to meet a target, and an employer with reasonable grounds incurs no penalty or disadvantage.

That distinction is where most employers will win or lose. Vague explanations, or plans that ignore the targets entirely, will not hold up under inspection. A plan built on an honest barrier analysis, covering your recruitment pipeline, your promotion practices, and the actual labour market for the skills you need, will.

Targets are not quotas

It is worth being clear about the other side of the line. The requirement to take affirmative action measures does not require an employer to adopt any policy or practice that would establish an absolute barrier to the employment or advancement of people who are not from designated groups. Completely excluding non-designated candidates from being shortlisted could be found to be exactly such a barrier, and risks a finding of unfair discrimination. Building a pipeline towards senior management through rational career-pathing is lawful. A closed door is not.

The safest position is also the most defensible one: real numbers, real reasons, and real evidence behind both.

What to do before September 2026

• Confirm whether you meet the 50-employee threshold. Check headcount, not turnover.
• Identify the sector targets that apply to you, and compare them honestly against your current workforce profile.
• Conduct a barrier analysis and document it. Where you will miss a target, record why now, while the evidence is fresh.
• Consult your employee representatives on the section 21 report before it is submitted. This is a legal requirement, not a courtesy.
• Have your plan and your justifications reviewed from outside the business, before the Department reviews them for you.

Sources: EE Amendment Act 4 of 2022; EE Regulations 2025 and Determination of Sectoral Numerical Targets (Government Gazette, 15 April 2025); NEASA & Sakeliga NPC v Minister of Employment and Labour (Case No. 107022/2025), Gauteng High Court, 28 August 2025; Constitutional Court leave refused 10 March 2026; SCA leave dismissed with costs 13 March 2026; Schedule 1, s 21 and s 53, EEA 55 of 1998.

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